DP4331 Asymptotic Analysis of Large Auctions

Author(s): Gadi Fibich, Arieh Gavious, Aner Sela
Publication Date: March 2004
Keyword(s): asymmetric auctions, asymptotic methods, collusion, large auctions, revenue equivalence, risk-averse bidders
JEL(s): D44
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4331

We study private-value auctions with a large number of bidders. We calculate approximations of the equilibrium bids and the seller's revenue in first-price auctions regardless of whether the bidders are symmetric or asymmetric, or risk-neutral or risk-averse. Furthermore, we show that first-price auctions with asymmetric bidders, or risk-averse bidders, are asymptotically revenue equivalent to wide classes of standard auctions.